Ensuro Implements Quadrata for Improved KYC Process
As a regulated entity, we at Ensuro are required to comply with strict AML (Anti-Money Laundering) regulations. KYC (Know Your Customer) is a crucial step in this compliance process, and it involves verifying the identity of customers or clients to prevent financial crimes such as money laundering and terrorism financing.
This process implies that the user has to link their personal documentation (such as passport, driver’s license, etc.) with the wallet used to interact with Ensuro. This personal information, together with the on-chain activity of the wallet, is used to identify if the address is linked to illicit activities or if the user is from any sanctioned country. If none of that happens, the user is whitelisted to interact with Ensuro in order to provide liquidity.
To address these challenges, we initially implemented Persona, a tool for collecting personal information and validating personal IDs. However, this solution required users to link their personal documentation with the wallet used to interact with Ensuro, exposing their personal information to our system, and creating a central point of vulnerability for sensitive data. Additionally, requiring users to complete KYC for each DeFi protocol they used created an inconvenience for our LPs, as they had to repeat the same process multiple times, increasing the risk of data breaches and privacy violations. Overall, we recognized that these privacy risks posed significant concerns for our users and sought to find a better solution that prioritized their privacy while still allowing us to comply with regulatory requirements.
In our search for an alternative solution, we found Quadrata, an identity solution for Web3. Quadrata collects personal information using different identity verification solutions and runs a series of analysis both on-chain and off-chain. With that information, they mint a privacy-preserving *passport*, that allows us to query only the information we need such as:
- AML score: a rating they produce based on the likeliness of that address and person of being linked to illicit activities.
- Country
- If it’s an accredited investor or not (only for US citizens).
- Sybil resistant DID: a number that uniquely identifies a person or a business.
This passport once minted can be used also for other protocols working with Quadrata, relieving the user from doing the identity verification process for each one.
Regarding the AML score, the analysis of the user activity is not done only on sign-up but instead is done continuously and we will receive an alert when the score changes.
With this solution, we are able to access only the necessary information we require for AML compliance, without accessing users’ private information such as name, address, or ID photo. However, in certain cases, like when a regulator or authority requires access to this information, we can request Quadrata’s provider to share the necessary details with the regulator.
Here you can see a video about what the new sign-up experience looks like.
We think this change shows our commitment to regulations and the fight against AML/ATF, while we also care for user experience and privacy.
About Ensuro
Ensuro is building a decentralized capital provider for insurance risk. We use smart contracts to curate competitive insurance portfolios. We allow anyone to invest in insurance risk and reap its benefits. By opening up the insurance market to new players, we fuel innovation for established and upcoming insurance partners.
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